The bank’s Travel & Leisure equities report - which contains tips on which listed companies to invest in - expects demand to rebound quickly, with the experience of July-September suggesting that when consumers can spend on leisure, they do.
HSBC has positive views on hotels, pubs and caterers but is more cautious on leisure travel and gaming.
It also believes that the majority of listed company balance sheets are strong enough to get them through to the end of lockdown.
It says that the pub and restaurant sector is an area where survivors should see some market share gains and that “competition doesn’t need to contract to make life easier. It just mustn’t continue to grow at the same rate as in the past as this should accelerate life for like sales and profit growth”.
“With balance sheets of independent/private-equity-backed operators now likely stretched, that sounds reasonable,” the report continues.
The bank has buy ratings on JD Wetherspoon and Mitchells & Butlers, which it says have the highest quality estates, while Marstons remains on hold.
It also has a buy rating on Wagamama and Frankie & Benny’s owner Restaurant Group should remain a “long-term winner”.
Rather optimistically, the report assumes that restrictions on businesses will start to be lifted at the end of March.
“With vaccination rates picking up (especially in the UK), we believe it’s reasonable to have a degree of confidence that the end of restrictions (or at least the start of the end) should come relatively soon.”